UNITED STATES - TriCon Capital was only able to attract $350m (€257.6m) for its latest commingled fund, TriCon IX - just over 40% shy of its $600m target.

David Berman, president of TriCon, argued the situation shows how capital raising has changed over the past 18 months, when TriCon first started talking to investors about investing in the commingled fund.

"We felt it was best to halt the capital raising now and start to put the capital to work. There are very few pension funds in the United States that have capital available to invest at this time," said Berman.

That said, TriCon thinks there are strong investment opportunities available now, given the state of the market.

"We can now buy finished single-family lots from banks and other distressed sellers at discounts of 20% to 80%," said Berman.

The real estate manager has already invested around one-third of the equity in the fund, having completed deals at the end of 2008 in Northern and Southern California, Phoenix and Atlanta, and will continue to look for additional deals here as well as Las Vegas and Florida.

The intention is to hold onto assets until 2011 - when TriCon thinks the single-family market will have turned - and then either sell to a homebuilder or set up a joint venture to build these lots.

There is no leverage on TriCon IX commingled fund and the long-range projected gross IRR for investors is 20%.

The original lead investor for the commingled fund was the Teacher Retirement System of Texas, having made a $125m commitment to the fund and earned $42.3m from it by the end of last year.

Other investors in the commingled fund include Ohio Public Employees Retirement System, Ohio Police and Fire Pension Fund and San Bernardino County Employees Retirement Association.